- Futures spreads show us the real supply and demand situation of any market. That point is not up for debate.
- In the case of Chicago SRW wheat, the September-December futures spread has been so bearish over the past month the CME's maximum commercial storage rate will be triggered.
- I disagreed with the idea of the CME's Variable Storage Rate idea back when it was first proposed more than a decade ago, and believe it or not my opinion hasn't changed.
This week in the grain and oilseed sector the major topic of discussion has been market supply and demand, how we differentiate between what’s real and what’s imaginary. I’ve talked about the use of basis and futures spreads as our reads to understanding the real world, and at this point if this isn’t the generally accepted view then there are some things I simply can’t fix. If you still believe the best view of supply and demand comes from USDA, NASS, media opportunity crop tours, etc., then I’ve got a mountain villa in south central Kansas to sell you. The fact futures spreads show us commercial positioning is beyond debate, so I won’t be doing it anymore. I don’t have enough time left on this planet to be wasting so much of it.
